Not many people know that there is a category of debtors that are collection proof. One simply cannot get blood from a stone.

“It goes without saying that the U.S. economy is the pits, but just lately, it has been offering a glimmer of hope for the future. Unemployment is still critical in the nation, and millions of Americans have been facing financial hardship for the last four years. Without a job, faced with mounting debt and no way to pay it, bankruptcy has become a reality we see every day. Bill collectors become a part of your waking life. Lawsuits often follow,” said Kevin Ahrenholz, an Iowa bankruptcy lawyer

Usually, when lawsuits are filed against a debtor, the debtor realizes it is time to take action, and that action may well be filing for bankruptcy protection. “What many people don’t realize is that there is a group of debtors, the ones with hardly any assets that are collection proof. Put another way, there are no assets a creditor can attach after a judgment. It may also mean that the debtor doesn’t have a job where their wages can be garnisheed or that they don’t live in a state that permits garnisheeing wages,” Ahrenholz said.

“For collection proof debtors, you’d want to ask a competent bankruptcy lawyer what rules apply in the state you live in, as it tends to vary. Other than that, if getting calls all hours of the day from collectors doesn’t bother you or you have found a way to ensure no one gets your phone number, you might be able to avoid collections efforts until the statute of limitations passes, which is from three to ten years, depending on where you live. Seriously though? I don’t recommend you do this, and it would look really bad on your credit report,” Ahrenholz said.

While some may think seriously about avoiding paying a debt for up to 10 years, the easier way to accomplish that is to file for bankruptcy protection. When a petition is filed, all collections action ceases under a provision called the automatic stay. The stay applies to all types of bankruptcies and halts certain lawsuits, evictions, creditor harassment, attachments, foreclosures, garnishments and utility shut-offs.

“Every bankruptcy is different, just as everyone’s situation is unique, and depending on which state you live in, there may be different rules and regulations and exemptions. This is why you definitely need an experienced Iowa bankruptcy lawyer to guide you through the bankruptcy process if you are in financial dire straits,” Ahrenholz said.

This is a great story with a nice little twist, where a bank gets back what it handed out, in spades.

“In this reported bankruptcy case a couple turned the tables on a bank, by foreclosing on them. Yes, you heard that right, the couple managed to foreclose on the bank,” said Kevin Ahrenholz, an Iowa bankruptcy lawyer.

It all started when the bank goofed up by even starting foreclosure proceedings on the couple’s home in the first place. In fact, the couple had never even had a mortgage loan on the property, because they had paid cash for it. However, the bank ignored that for some reason and proceeded to initiate foreclosure. “Fed up with arguing with people who were not listening, the couple hired a lawyer and proved to the court that they paid cash for their home. They were awarded legal fees for defending themselves,” Ahrenholz said.

The bank was not particularly enthusiastic about the judgment, and instead of owing up to their mistake and paying the couple’s legal fees, they dug in their heels and did nothing for over five months. The couple’s lawyer started to legally seize the bank’s assets. The lawyer, sheriff’s deputies and a batch of movers foreclosed on the bank. They did not just foreclose on paper either, desks were taken out of the bank and office equipment went along with any cash in the teller’s drawers.

“The bank manager lasted about an hour out on the street and coughed up a check for legal fees. If they had done that in the first instance, they would not have made such a big splash in the news. Aside from the irony of this case, it shows that creditor/debtor relationships should be two-way streets. In other words, credit relationships are between humans, and humans make mistakes. Acknowledge that mistake, rectify it and move on. “Don’t turn the situation into a vendetta and hide from the obvious,” Ahrenholz said.

The bottom line is that on many occasions, credit companies, banks, credit unions and even mortgage companies just do not take the time to properly check their paperwork. “As we can see in this case, not taking the time to check facts cost the bank money and dignity. All it would have taken was a few minutes of someone’s time to check facts. This whole thing could have been avoided. Unfortunately, common sense seems to have gone up in smoke these days,” Ahrenholz said.